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Welcome (back) to the Prohibition Era. The latest restrictions on the advertising of wagering services to Australians

As 2015 draws to a close, Australian licensed wagering operators should be aware of the latest changes to the laws that apply to the promotion of their services to residents of New South Wales, Australia’s most populous state.

As operators would be aware, the laws of New South Wales apply generally to each wagering operator that provides services to residents of that State. Provisions of the Betting and Racing Act 1998 (NSW) (formerly the Racing Administration Act 1998 (NSW)) and the Betting and Racing Regulation 2012 (NSW) (formerly the Racing Administration Regulation 2012 (NSW)) restrict the manner in which wagering services may be promoted. For example, the most common restrictions include, in broad terms:

a prohibition on the promotion of wagering services to a minor; and

the depiction of wagering as a means to financial betterment.

A number of significant amendments have been made to the relevant laws in New South Wales. We set out an overview of these amendments below.1

NSW Inducement Prohibition

Each of New South Wales, South Australia, Western Australia and Victoria prohibit, in general terms, inducements to gamble. The New South Wales Government recently announced amendments to the prohibition on inducements contained in the Betting and Racing Regulation 2012 (NSW) (NSW Inducement Prohibition).

These amendments will come into effect on 4 January 2015.

The NSW Inducement Prohibition had previously prohibited the publication of any advertisement that offers any credit, voucher or reward as an inducement to participate, or to participate frequently, in any gambling activity. This was stated to include any inducement to open a betting account. The amended NSW Inducement Prohibition prohibits the publication of any advertisement that:

“offers any inducement to participate, or to participate frequently, in any gambling activity”

Again, this was deemed to include any inducement to open betting account.

The purpose of this change is so the regulator, the Office of Liquor, Gaming and Racing (OLGR) avoids arguments that a particular offer should not be considered to be an inducement as it does not constitute a “credit”, “voucher” or “reward”.

However, what is perhaps more significant than the changes to the wording of the NSW Inducement Prohibition is the increased enforcement undertaken by the OLGR. In the latter half of 2015, there have been numerous prosecutions initiated by the OLGR against Australian licensed wagering operators. For example, the OLGR has issued a media release2 stating that successful prosecutions were brought against ClassicBet and Sportsbetting.com.au and there have been media reports of prosecutions also having been brought against a number of other leading bookmakers and Tabcorp Holdings Limited. Many of these prosecutions are ongoing.

Despite the NSW Inducement Prohibition being in place for a number of years now and the widespread promotion of offers such as “open account offers” (for example, where an operator matches a deposit made by a new customer), there has been limited enforcement activity in the Courts by the OLGR against wagering operators until earlier this year.

The OLGR has stated recently that various promotions, if publicly available, for example, through being displayed publicly on billboards or even on a bookmaker’s website, will be considered to be inducements. Examples of the promotions that will be considered to constitute an inducement if advertised in this manner include:

offers of free or bonus bets;

money back offers;

referral bonuses;

rewards points for bets; and

bonus odds.

There are numerous questions which remain unanswered. For example, is an email setting out these same offers and sent only to existing customers of an operator considered to be in breach of the NSW Inducement Prohibition?

How the OLGR will interpret the NSW Inducement Prohibition and the way in which enforcement of the NSW Inducement Prohibition will take place has been the subject of considerable discussion and a number of public forums convened by the OLGR.

What is clear is that the intention of the policy is to reduce – significantly – the widespread marketing tactics utilised by Australian licensed wagering operators to acquire and retain new customers. Whether this policy is achieved in practice will be watched closely, particularly as there will remain strong competition for customers by the wagering operators.

Going forward, it will also be interesting to see if similar changes are considered by other States/Territories or whether a more harmonised national approach is adopted.

NSW Event Advertising Prohibition

Another change made to the Betting and Racing Regulation is the enactment of a ban on all advertising for betting on a particular sporting event during that sporting event (NSW Event Advertising Prohibition). Currently, a prohibition of this nature does not exist in the laws of any Australian State/Territory. However, restrictions with similar effect exist in the advertising code adopted by the Australian free to air television broadcasters (Free TV Code).

The NSW Event Advertising Prohibition will come into effect on 1 March 2016.

The principal objective of the NSW Event Advertising Prohibition is to prevent any promotion relating to betting on an event during that event. This prohibition is directed at any person who publishes the promotion and will cover any broadcaster or other person who publishes the relevant advertisement, as well as the relevant bookmaker. However, any internet advertising is exempt from this prohibition.

The NSW Government’s intention in introducing this Event Advertising Prohibition is to give the OLGR an avenue of enforcement which is consistent with the restriction on the broadcast of live odds contained in the Free TV Code. Currently, if the OLGR or the NSW Government is aggrieved by any advertising which it perceives to be in breach of the Free TV Code, the only option available to it is to write a complaint to Free TV, the industry body which represents all of Australia’s commercial free-to-air television licensees and which administers the Free TV Code. However, from 1 March 2016, the OLGR will be able to enforce the NSW Event Advertising Prohibition. Of course, there is a disconnect between the restriction in the Free TV Code and the NSW Event Advertising Prohibition. The restriction in the Free TV Code is primarily concerned with the advertising of live odds – that is, the advertisement of odds during the broadcast of a sporting event. The NSW Event Advertising Prohibition is broader and covers any advertising encouraging customers to bet on an event during that event, irrespective of whether or not odds are displayed or mentioned as part of an advertisement.

Further, on a strict reading of the NSW Event Advertising Prohibition, where a broadcaster televises a sporting event that is taking place in a venue outside New South Wales and that venue contains signage sponsored by a wagering operator that states “bet now” and the operator’s contact details, there is a technical argument that the broadcaster may be in breach of the NSW Event Advertising Prohibition. The OLGR has indicated that it does not intend to interpret the NSW Event Advertising Prohibition so broadly, however, there is scope for similarly broad interpretations to be adopted on the face of the NSW Event Advertising Prohibition.

It remains to be seen how the NSW Event Advertising Prohibition will be interpreted and applied against operators and how it will apply to third parties, such as broadcasters and other media entities. Also, it remains to be seen whether the other States/Territories will follow NSW’s lead and include similar restrictions in their laws relating to wagering.

The initial reaction of broadcasters has been of great concern, principally as they are at risk of liability under the NSW Event Advertising Prohibition.

Conclusion

These prohibitions are wide ranging and have considerable ramifications for wagering operators in their advertising to customers located in New South Wales, and throughout Australia. This is due to the difficulty involved in limiting the visibility of a promotion so that it is made available only to, or so that it is not available to, New South Wales residents.

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